Philippines’ budget gives boost to health sector

The health sector emerged as one of the big winners in the Philippines’ 2016 draft budget, with a significant increase in funding allocated for the coming year.

On July 6, President Benigno Aquino III approved the government’s draft budget and forwarded it to Congress for ratification. At more than P3trn ($66.62bn), the 2016 budget is the largest ever, with total allocations up 15.2% on 2015, set to represent 19.5% of GDP in his administration’s final year.

The Department of Health (DoH) was awarded P128.5bn ($2.85bn) for 2016, a 25% rise year-on-year. It was the second-highest increase in portfolio spending, after the Department of Public Works and Highways, which saw its allocation jump by 32%.

Given the government’s goal of achieving universal health care coverage by 2016, there is a strong push to improve access and efficiency. At present, about 82% of the population is covered.

However, despite pledges to improve services, challenges to public health provision remain, including bottlenecks in funding allocation and barriers to programme delivery for resource-poor communities in rural areas.

Booster jab for health

After President Aquino’s state of the nation address on July 27, the budget was submitted to Congress for deliberation. While some of the allocations may spark debate, the proposed increase in spending on health is likely to receive strong support.

Outlining the budget in a press statement, Communications Secretary Herminio Coloma Jr said the higher allocation to the health sector was part of broader government efforts to improve health care services, especially to the poor and most vulnerable sectors of society.

Increased funding for other departments will also have a major impact on health issues. The Department of Public Works and Highways was granted additional funds to address concerns over delivery of clean water to communities and strengthen flood mitigation measures.

A joint report by the World Health Organisation and UNICEF, published in early July, estimated that at least 8.4m Filipinos do not have access to purified water − with this number going up during times of flooding − and 7.4m do not have access to the most basic of toilet facilities.

Tim Grieve, chief of water, sanitation and hygiene for UNICEF Philippines, said despite the progress made in improving services, those in low-income brackets were still at risk. “Under the leadership of the DoH, the Philippines has made significant advances in sanitation over the last 20 years,” Grieve stated at the release of the report. “However we are in jeopardy of not reaching the 2015 Millennium Development Goal on sanitation because the poorest 20% of the population are sliding,” he added.

In addition to bolstering water resource development, the Department of Education has been tasked with administering a series of health-oriented initiatives. One of these is its Basic Educational Facilities Fund, which provides resources for the installation of toilets and communal drinking faucets in state schools. Other programmes offer nutritional meals to children in need and training in hygiene.

Meeting allocation goals

In previous years project delivery has been an issue, with the implementation of plans delayed or rolled over into subsequent budgetary cycles. Last year P303bn ($6.7bn) – or 13% of total approved budget appropriations – was not spent, though the DoH was not one of the major culprits in this respect. In recent months, ratings agencies Moody’s and Fitch have both cited under-spending as a serious problem for the government, as bottlenecks in budgetary outlays hinder growth and service delivery.

“The government’s ambitious growth target may be difficult to achieve in the absence of more effective budget execution,” Moody’s noted in a report from June, cutting its forecast for 2015 by half a percentage point to 6% due to sluggish growth in the first quarter.

Despite potential challenges, the budgetary increases have the potential to make meaningful improvements to the health of the nation as opportunities grow throughout the economy and the government steps up spending on capital works projects.